MUMBAI: The Sensex conquered 19,000 by surging 188 points on Thursday with banking stocks leading the charge. The Indian rupee rose to five-and-a-half month high, breaching the $52 mark, to close at $51.74 on the back of sustained FII inflows.

The government is likely to push ahead with big-bang reforms as the Union Cabinet will be considering a number of crucial agendas like raising the FDI cap in insurance sector to 49 per cent, opening of pension fund to foreign investment, creation of National Investment Board, etc.

On Thursday post market hours, the Cabinet approved proposals allowing foreign investors to own up to 49 per cent in the insurance firms which will augur well for private sector insurance companies which require huge amount of capital.

We will not be surprised to see if both the Nifty and the Sensex hit all-time highs well before the budget. This is also well reflected in the charts of both the major indices.

Nifty has seen breakout from the W formation at 5,740 on the weekly charts. If Nifty gives weekly closing above 5,740, we will see it rallying to 5,908 -5,924.

These levels are also likely to coincide with the rising channel formation on the weekly chart. The fast stochastic oscillator is in overbought zone, hence Nifty may be in for some breather before finally attempting to hit its previous major high of 6,338.

For the Sensex, weekly close above 19,131 will give breakout from W formation. Similar to the Nifty movement, the Sensex is also moving in rising parallel channel, the upper end of the channel being at 19,119. It is seen that both the levels are in close range from each other.

Thus the breakout may see the Sensex rallying significantly and may surpass its previous top at 21,108.

(The author is CEO of Latin Manharlal Securities: The views and recommendations expressed in this section are the analysts' own and do not represent those of EconomicTimes.com)